Geopolitical Market Risk

The European economy is expected to suffer more severely than the US from the conflict's economic consequences due to greater energy dependency. None of the geopolitical inputs driving the current regime can be forecast; the correct response is to adapt risk management rather than predict them. The current high-volatility regime is driven by unpredictable geopolitical inputs including US policy announcements, Iranian military declarations, and drone activity. US crude oil futures crashed 20–30% following Trump administration declarations, then reversed upward as conflict risk was reintroduced. A negative NFP print combined with conflict-driven oil price movement makes traditional correlations between data releases and market reactions less reliable.